Supreme Court ruling opens up sports betting outside of Nevada

NJ Gov. Chris Christie says that if the Supreme Court rules in his state's favor in a major sports betting case, then sports betting would quickly become available in the state. The GOP governor was in Washington to hear arguments in the case. (Dec. 4)

AP

Nevada just lost its firm grip on sports betting after the U.S. Supreme Court struck down a federal law on Monday that outlawed the activity in other states.

New Jersey won a landmark ruling from the Supreme Court Monday that could lead many states to legalize betting on college and professional sports. Sports betting has primarily been limited to Nevada and a few smaller operations in other states that were grandfathered by the Professional and Amateur Sports Protection Act of 1992.

Outgoing New Jersey Gov. Chris Christie was at the Supreme Court in December to hear his state's ...more

Outgoing New Jersey Gov. Chris Christie was at the Supreme Court in December to hear his state's challenge to a ban on sports betting.

Alex Wong, Getty Images

The justices ruled 6-3 that a 25-year-old federal law that has effectively prohibited sports betting outside Nevada by forcing states to keep prohibitions on the books is unconstitutional. The ruling could set the stage for other states to expand legalized gambling as a source of government revenue.

Justice Samuel Alito, a New Jersey native, wrote the court's opinion in the case. Justices Ruth Bader Ginsburg and Sonia Sotomayor dissented, with Justice Stephen G. Breyer agreeing in part with the dissent.

Barring action from Congress, the ruling effectively allows every state to pursue a slice of the lucrative sports betting pie. Last year, Nevada sportsbooks made nearly $5 billion, according to the Nevada Gaming Control Board. The number is eclipsed by the amount generated by illegal sports betting in the United States each year.

The Supreme Court ruling was welcomed by the American Gaming Association, which has pushed for legalized sports betting across the United States for years.

“Today’s decision is a victory for the millions of Americans who seek to bet on sports in a safe and regulated manner,” said Geoff Freeman, American Gaming Association president and CEO, in a statement. “Today’s ruling makes it possible for states and sovereign tribal nations to give Americans what they want: an open, transparent, and responsible market for sports betting.”

The American Gaming Association’s comments were echoed by Monarch Casino & Resort Inc., which operates the Atlantis Casino Resort and Spa in Reno and Monarch Casino Black Hawk in Colorado.

Some see legalized sports betting across the United States as something that would siphon business way from Nevada. The expansion of sports books into other states, however, is a potential opportunity for companies such as Monarch Casino & Resort, which operates its own sports book and also has its own race and sports book mobile app, said Chief Operating Officer David Farahi.

“Long-term, it’s a good thing for Nevada because Nevada-licensed casino operators who have been in the business understand how the industry works,” Farahi said. “So we have the opportunity to share that with other states and grow our businesses.”

Eldorado Resorts Incorporated, which has 20 properties in 10 states, declined to comment on the story. The Peppermill Resort Hotel, which is putting in a $3 million upgrade on its sports book, says the sports book issue is something it has been monitoring through the years and will continue to do so.

“It will be interesting to see how (sports books) evolve and how many states pick them up,” said Stephen Ascuaga, corporate director of business development for the Peppermill. “We’re interested to see how it all plays out.”

MGM Resorts International, which operates several hotel-casinos in Las Vegas as well as outside of Nevada, also says it is “well positioned for a post-PASPA environment.”

One common theme brought up by MGM as well as the American Gaming Association is the need for a new regulatory environment. One concern surrounding the advent of sports betting across the United States within the gaming industry is having to deal with disparate laws among the various states that opt to legalize the activity following the Supreme Court decision.

“We look forward to working with legislators and policymakers to achieve a regulatory outcome that benefits states and consumers alike while ensuring the integrity of sports,” MGM said in a statement released after the ruling.

The Nevada Gaming Control Board, meanwhile, says it supports the Supreme Court decision and is ready to serve as a resource for others looking into implementing sports betting. With Nevada being the only jurisdiction to offer a full range of sports betting options to the public for a long time, its model has proven to be successful, the board said.

“In the coming months, as individual states decide whether or not to authorize legalized sports betting, and embark on establishing their own regulatory frameworks, the Nevada Gaming Control Board looks forward to acting as a resource and sharing our model with other jurisdictions,” the board said in a statement.

New Jersey’s sports betting case was initiated by recently departed governor, Chris Christie, who had challenged the Professional and Amateur Sports Protection Act, passed by Congress in 1992 to preserve the integrity of the nation's most popular sports.

It was a victory for the state's recently departed governor, Chris Christie, who had challenged the Professional and Amateur Sports Protection Act, passed by Congress in 1992 to preserve the integrity of the nation's most popular sports.

It was a defeat for the National Collegiate Athletic Association and the four major professional sports leagues — baseball, football, basketball and hockey — that had successfully blocked New Jersey in lower courts.

"Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own," Alito said. "Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not."

The court's action could jump-start action in Congress to pass legislation calling for federal regulation of sports betting — something the sports leagues would prefer over separate rules from state to state.

Congress passed the 1992 law to preserve what lawmakers at the time felt was the integrity of the games. But New Jersey and its allies argued that it ran afoul of the 10th Amendment, which reserves for the states all powers not delegated to the federal government.

Christie, who left office in January, signed the state's first law legalizing sports betting in 2012 after voters in 2011 overwhelmingly approved an amendment to the state Constitution to allow it.

That law was overturned by federal district and appeals courts, but the state tried again in 2014 with a law that stopped short of legalization but repealed the prohibition against running a sports books at tracks and casinos. That also was rejected at the trial and appellate levels, but the Supreme Court agreed last June to hear the case.

During oral argument in December, several conservative justices said the law impermissibly "commandeered" states to keep their bans on the books. But several liberal justices said Congress merely pre-empted state laws, a commonplace action.

What has made the law anachronistic is the advent and rapid growth of Internet gambling. Rather than stopping sports betting, it helped push more of it underground.

In the decades since the legislation was passed, opposition among the sports leagues has waned. The National Hockey League has located a team in Las Vegas, and the NFL's Oakland Raiders are due to follow. National Basketball Association commissioner Adam Silver has endorsed sports betting, and Major League Baseball has invested in fantasy leagues.